KPMG cost cuts help push profit up 27 per cent

ACCOUNTING giant KPMG said today the “first and toughest year” of its plan to restore growth has been a success, with earnings up 27 per cent in the 12 months to the end of September.

The company, one of the so-called Big Four professional services firms, posted £455m in annual profits on revenues up 0.4 per cent to £1.81bn.

A three per cent fall in partner numbers, from 602 a year ago to 583, helped push average partner pay up 23 per cent to £713,000. Meanwhile, KPMG’s 10,800 UK staff will enjoy a 20 per cent bigger bonus pool of £73m for the year. The company’s overall headcount has risen by around 200 in the last year.

The strong results compare to a 13 per cent fall in profit in 2012, when the firm warned it was looking to cut hundreds of jobs.

The company’s chairman Simon Collins, who took the helm in October 2012, said KPMG has managed to get “a sustainable grip on the bottom line” this year.

“We have ambitious plans to build on 2013’s successes in cyber security and infrastructure, amongst others, and drive growth with additional strategic investments,” he added in a statement.

KPMG said today it hopes to spend £450m on its UK business over the next three years.

Last month the firm also unveiled a $100m tech-focused investment fund, as it joins its Big Four rivals in searching for new work beyond their heartland bookkeeping businesses.

In the year to September, KPMG posted a 16 per cent rise in audit profits to £178m, following a flat 2012, while earnings from its tax practice fell slightly to £140m and profit from advisory work was up 15 per cent to £308m.

The global KPMG network last week posted a 3.7 per cent rise in net fee income to $23.4bn.